In 2023, decarbonization, circularity, biodiversity, and water management were confirmed as key environmental impact areas for us to continue to focus on in our strategy. During 2023, we continued to increase the number of articles we define as sustainable, aiming at 90% of our articles to be sustainable by 2025, and to work toward achieving climate neutrality (CO2e) across our entire value chain. We also assessed selected key materials potentially contributing to biodiversity risks and committed to a deforestation-free leather supply chain latest by 2030. We further evolved our approach to circularity to support the creation of an ecosystem that is necessary to scale circular solutions in our industry. This included focused engagement in cross-industry projects aimed at unlocking circularity, such as ‘T-REX’ and ‘Sorting for Circularity.’ We also continued to address water efficiency and quality in our supply chain, with an advanced chemical management program and ambitious targets in place.
We empower our employees to become sustainability ambassadors, just as we invite consumers globally to engage and connect with us on the topic of sustainability. Our established running movement ‘Run for the Oceans’ has evolved into ‘Move for the Planet,’ an initiative aiming to raise consumer awareness for climate change by supporting selected grassroots sports organizations. adidas has partnered up with not-for-profit organization ‘Common Goal’ to help communities in need engage in climate action through sport. This includes initiatives such as renewing a community’s sports field using recycled materials and providing training on how to reduce plastic waste at sports facilities.
We believe that moving toward achieving the targets we have defined for 2025 and beyond will set us up for future success. Engaging closely with our suppliers remains critical to achieving our targets. We are therefore leveraging our long-term relationships with suppliers to ensure they can help us achieve our decarbonization targets and we are also working closely with partners to scale innovative materials, recycling technologies, and circular business practices across the value chain.
Targets for 2025 and beyond: Environmental impactsTarget year
Area
Target
Baseline
Own operations
Achievement of climate neutrality (CO2e) 1
15% water intensity reduction (m 3 /m 2 )
95% waste diversion rate
Supply chain
Adoption of renewable energy at strategic Tier 1 and Tier 2 supplier facilities to keep emissions flat
40% water consumption intensity reduction at Tier 2 supplier facilities
80% of chemical formulations used by our suppliers for production achieve the highest level of conformance with ZDHC MRSL ('Level 3’)
90% of suppliers that operate on-site effluents plants to achieve ZDHC ‘Wastewater Foundational Level’
Product
Sustainable article offering
9 out of 10 articles will be sustainable, meaning that they are – to a significant degree – made with environmentally preferred materials 2
15% reduction of GHG emissions per product
Entire value chain (from raw material production to own operations)
30% reduction of GHG emissions 1
Achievement of climate neutrality (CO2e)
Targets received approval by the Science Based Targets initiative (SBTi). We will re-submit these targets to SBTi for approval throughout 2024.
Subject to reasonable assurance engagement of PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft.
The table provides an overview of the targets we have set ourselves that will help us reduce our environmental impacts.
The climate crisis presents the most pressing long-term challenge facing civilization. For that reason, adidas has set targets that will help us limit emissions aligned with the 1.5°C benchmark and contribute to a net-zero future. adidas has committed to:
Our emission reduction targets by 2025 and 2030 have been approved by the ‘Science Based Targets initiative’ (‘SBTi’). 2 Within the 2025 target, we commit to reducing absolute Scope 1 and 2 GHG emissions by 90% 3 from a baseline of 2017. This target is consistent with the reduction pathways needed to prevent a rise in average temperatures of more than 1.5°C – the most ambitious goal of the Paris Agreement. Our GHG reduction target for value chain emissions (Scope 1, 2, 3) of 30% by 2030 (baseline 2017) meets the SBTi’s criteria for ambitious value chain goals, meaning they are in line with current best practices.
When it comes to decarbonization, we believe that data quality is critical. Therefore, in addition to developing a tool that enables us to quantify, monitor, and be transparent about our carbon footprint along our entire value chain, we have put considerable effort in gathering more primary data from our suppliers over the last few years. This has allowed us to gain more precise insights into carbon emissions, energy consumption, and the impact of our decarbonization initiatives.
As both the quality and availability of data improved significantly in 2023, we were able to update our methodology for measuring carbon footprint across our value chain. Consequently, we recalculated the 2022 data to ensure year-over-year comparability. This updated methodology continues to be fully aligned with international methodology standards, provided by e.g. the GHG Protocol and SBTi, and reduces the dependance on assumptions and generalizations typically presented by secondary data.
As in the previous year, the 2023 results show that our environmental impacts are distributed unequally across the value chain, with the most significant impacts generated in the supply chain, particularly in raw materials production and processing.
The following table shows the total annual GHG emissions across our value chain. The average Scope 1, 2, and 3 annual GHG emissions per product for 2023 decreased by 3% compared to the previous year. This reduction has been driven by the work done with our suppliers, such as continuing with the phase-out of coal in our manufacturing facilities and the increased use of renewable energy. Our innovation effort, that has also enabled us to use low-carbon manufacturing methods and materials, as well as decreased production volumes due to high inventory levels in the market translated into a 24% reduction in total absolute GHG emissions 4 compared to the previous year.
Breakdown of annual GHG emissions 1,2,32023
2022
Scope 1 emissions (in tons CO2e)
21,779
21,856
Own retail stores
Scope 2 emissions, market-based (in tons CO2e)
142,457
142,293
Own retail stores
Scope 3 emissions (in tons CO2e)
5,894,811
7,635,784
Purchased goods and services
Upstream transportation and distribution
Use of sold products
End-of-life treatment of sold products
Total emissions (in tons CO2e)
6,059,047
7,799,933
GHG emissions per product, total emissions/production volume (kg CO2e per product)
6.3
6.5
Values reported cover production seasons SS23 and FW23. Within Scope 3, ‘Purchased goods and services’ considers the production and processing of raw materials for which impacts are estimated based on quantities of materials and life-cycle analysis data. All key production processes are considered. Primary, secondary, and tertiary packaging material quantities are included. The quantities are estimated based on sales volumes, using composition and weight assumptions from the ‘Product Environmental Footprint Category Rules’ (‘PEFCR’). Furthermore, ‘Purchased goods and services’ also considers the assembly phase, for which impacts are estimated by applying emission factors to reported energy consumption from Tier 1 strategic suppliers. Sourcing volume data is used to estimate the impact of non-strategic suppliers (<20%). ‘Upstream transportation and distribution’: Quantities of goods for specified distribution routes are combined with transport emissions factors. ‘Business travel’: Calculations are based on the business travel data system. ‘Use of sold products’: Emissions caused by washing, drying, and ironing of sold products throughout their lifetime based on data on average care cycles from PEFCR and life-cycle analysis datasets. ‘End-of-life treatment of old products’: Emissions caused by disposal of sold products are estimated based on sales volumes and typical waste disposal routes (e.g., landfill and incineration). Scope 1 and 2: Impacts are calculated based on 79% of reported environmental quantities (primary data) in the Health and Safety, Environment, and Energy (HSEE) own operations data collection systems and 21% by estimations. The estimations are calculated by scaling up the primary data collected at the facility or site level to a company-wide level on the basis of gross lease area (in square meters).
Intensity factor to calculate emissions per product excludes emissions resulting from ‘Use of sold products’ to align with our GHG reduction target for 2030 as approved by the SBTi.
Figures for Scope 3 emissions in 2022 were revised following a methodology update. Scope 3 emissions in 2022 applying the previous methodology totaled 7,523,545 tons CO2e.
During 2023, some of our suppliers purchased Energy Attribute Certificates (‘EACs’). The reduction of emissions resulting from these EACs were not factored into our footprint calculation, due to the current lack of consensus on concepts on the operationalization and accounting approach. Instead, we continued to collaborate with the industry to find more robust solutions that allow for Scope 3 interventions that further incentivize investments and overall long-term decarbonization of the industry.
adidas recognizes the importance of reducing land-related emissions. Therefore, in 2023, we started to quantify our emissions resulting from Forest, Land, and Agriculture (‘FLAG’) operations according to the SBTi FLAG Guidance. The results of our calculations (based on 2022 data) show that FLAG emissions represent only a minor proportion of adidas’ total GHG emissions, with the main impacts stemming from sourcing cow leather, cotton, and natural rubber. The result of 7% FLAG emissions 5 falls below the SBTi threshold for required FLAG target setting, but adidas will continue to work on reducing those emissions.
adidas recognizes the pivotal role of data and transparency as catalysts for increasing awareness and informed decision-making to mitigate the environmental impact of our products. This impact, largely resulting from decisions made during the design phase, underlines the importance of strategic interventions. In 2023, we achieved a critical milestone with the development of an in-house, state-of-the-art tool that allows us to measure the environmental footprint of any footwear or apparel product within our portfolio. Aligned with international standards, the methodology adheres to ISO 14067:2018 and has undergone rigorous third-party verification. This tool is seamlessly integrated into our existing creation systems, connecting and leveraging available life cycle assessment (LCA) data, ultimately speeding up the calculation process and enhancing accuracy.
This tool enables us to create higher transparency about product carbon footprints for consumers. In 2023, we managed to disclose the carbon footprint for selected articles and will continue to do so for an increasing number of articles in 2024.
Identifying ways we can make lower-impact products requires a detailed and thorough approach that includes not only optimizing our own operations but also the manufacturing of each of our products. As most of our carbon emissions occur outside our direct control, we collaborate with our suppliers located across the globe, helping them improve their carbon footprint during production processes.
Greenhouse gas emissions resulting from energy use during manufacturing of products at our supplier factories are one of the major contributors to the carbon footprint of our entire value chain. Consequently, working with our suppliers and helping them reduce their emissions is critical for achieving our decarbonization targets. As our supply chain is large and diverse, we benefit from setting and communicating clear ambitions and tangible goals for suppliers, while supporting them with expert know-how and training, and ultimately also measuring and rewarding them for progress made.
In 2022, we set clear expectations for developing a holistic approach to decarbonization in our ‘adidas Decarbonization Manifesto’ for our strategic suppliers at Tier 1 and Tier 2:
During 2023, we translated the high-level direction of our Manifesto into actionable goals and revised the framework we use to track performance of suppliers, helping us monitor how each supplier is contributing to our decarbonization efforts. These goals include increasing the use of renewable or low-carbon energy sources, improving energy efficiency, and demonstrating progress toward targets that are aligned with the SBTi. We incentivize suppliers for their performance, including product allocation priority, opportunity for existing, high-performing partners to gain market share, entry opportunity for new, disruptive supplier partners, as well as first-mover advantage and sustainability leadership position.
Key highlights of our suppliers’ progress during 2023 are as follows:
We are committed to reducing our GHG emissions in our own operations, i.e., our administrative offices, distribution centers, and own retail stores. In 2023, this equaled to a coverage of 3,491,966 m 2 of gross leased area.
We are following a clear roadmap across own operations to achieve our GHG emission-reduction targets, focusing on both steadily increasing environmental performance data coverage and continuing to implement eco-efficiency standards and processes through a holistic management system (‘Integrated Management System’ – ‘IMS’). We are working on measures such as improving energy efficiency, implementing on-site RE production, and sourcing renewable electricity. We continued to invest in our own operations and offered ‘Green Funds’ to subsidize local energy efficiency and on-site renewable energy projects. One such measure in 2023 was an on-site solar project combined with electrification of gas infrastructure used for heating at our distribution center in Caspe, Spain. For 2024, we plan several projects for implementation at our headquarter campus in Herzogenaurach, Germany, and at other own operation sites globally.
We further improved our coverage of energy data collection within our own operations. During 2023, we managed to increase our primary data coverage for our own retail sites by a further five percentage points compared to the previous year to 41% globally. Data coverage for administrative offices and distribution centers is at 100%, while data for showrooms and smaller offices was mostly estimated.
In 2023, our total energy consumption across own operations globally was 494,489 MWh (2022: 510,539 MWh), equivalent to total emissions of 164,236 tCO2e (2022: 164,149 tCO2e). While we continue our transition toward renewable electricity in Europe, in the past few years we decided to switch our focus from short-term initiatives, such as the purchasing of EACs for Europe and North America, to more impactful measures, e.g., securing long-term renewable electricity contracts such as PPAs. As a result, we saw no significant change in reported Scope 1 and 2 GHG emissions despite an overall decrease in energy consumption compared to 2022. In 2023, we signed a virtual PPA for Europe: For a period of ten years, adidas will be supplied with approximately 50,000 MWh of renewable electricity per year produced by a new solar project in Spain, starting in 2025. This will contribute to the long-term reduction of emissions from our European operations.
Our IMS helps us to secure all relevant ISO management systems certifications for key locations, such as environmental management (ISO 14001), health and safety management (ISO 45001), and energy management (ISO 50001). We aim to further expand these certifications to more key sites through implementation of the standards as well as internal and external audits, as they support our efforts to achieve our energy, water, waste, and health and safety targets. As of 2023, 70 sites (2022: 64) were certified for ISO 14001, 140 sites (2022: 112) for ISO 45001, and 324 sites (2022: 322) for ISO 50001 (applies to locations with more than 50 employees or space exceeding 4,500m 2 ).
We continue to use certifications that require consideration of environmental aspects for interior design and construction of own retail stores – including ‘Leadership in Energy and Environmental Design’ (‘LEED’) and ‘Building Research Establishment Environmental Assessment Method’ (‘BREEAM’) certifications. While we aim to obtain these external certifications for strategically relevant projects, we also apply a set of internal eco-efficiency standards that mirror the priorities of the LEED certification for all other projects. In 2023, seven of our own retail stores across the globe received LEED certification, with our retail store in Cape Town, South Africa, being awarded the highest level of recognition, LEED Platinum, for its advanced energy metering, indoor water use reduction and enhanced indoor air quality strategies.
adidas has been running water reduction programs for years and has built a strong awareness of the importance of this topic among its Tier 1 suppliers. Since 2021, we have been using a self-governance model that requires suppliers to take responsibility for their reduction efforts, while adidas continues to track and monitor their consumption. We continued to expand and focus our water reduction efforts by including additional Tier 2 suppliers with high water use in our environmental program. In 2023, Tier 2 suppliers achieved a 33% reduction in water intensity (m 3 /total product output value in US $), compared to the 2017 baseline. By 2025, we aim to achieve an overall reduction in water intensity of 40% against the 2017 baseline. This will be accomplished with the aid of new technologies and through continued support for our suppliers.
At our own operations globally, we aim to strengthen water efficiency and wastewater projects in the coming years. By the end of 2023, our water intensity at administrative offices and distribution centers totaled 0.138 m 3 /m 2 (2022: 0.145m 3 /m 2 ). In the year under review, we saw a decrease of the absolute volume of water withdrawal compared to 2022 due to reduced operations at some locations. Overall, we achieved an accumulative reduction of 28% (2022: 25%) compared to the 2019 baseline (0.193 m 3 /m 2 ), and, with that, exceeded the target we set ourselves for 2025.
We are dedicated to leading our supply chain to implement more sustainable chemical management practices using globally recognized guidelines throughout our production processes. We apply an end-to-end approach that includes using safe chemicals, eliminating potentially harmful substances, and ensuring proper discharge of treated wastewater that meets the highest standards.
As a founding member and signatory contributor, we maintained our strong collaboration with the Zero Discharge of Hazardous Chemicals (ZDHC) Foundation and supported them by actively participating in various task teams dedicated to the development of guidelines and trainings. In 2023, we were the only sportswear brand to achieve the highest of three possible performance levels ('Aspirational Level’) in the ZDHC ‘Brands to Zero’ program, demonstrating effective implementation of the ZDHC guidelines and tools within our supply chain, improving by one level compared to the previous year.
We make continuous efforts toward optimizing waste diversion across our supply chain with the aim of increasing the value of waste within the life cycle, e.g., through recycling or reuse. We have developed waste management guidelines to help our suppliers improve waste segregation in manufacturing, prioritizing recycling and reuse of non-hazardous waste. These guidelines specify that the non-recyclable waste materials should not be directly landfilled. We developed a waste diversion program to use non-recyclable manufacturing waste in energy production in collaboration with co-processing partners in our major sourcing countries. Co-processing is a proven and sustainable solution that can reduce pollution, reduce consumption of natural resources, reduce landfill space, and ultimately contribute to a smaller carbon footprint. To further optimize waste diversion, we have scaled up this solution across the globe, especially in sourcing countries with immature co-processing infrastructure. Globally, the suppliers enrolled in our environmental program collectively achieved a 96% landfill diversion in 2023.
At own operations, during 2023, we continued to focus on improving the quality of waste-related data from our administrative offices and distribution centers by upskilling team members on the data collection process of waste streams. This resulted in a higher data quality, but also a lower diversion rate. As of 2023, 98% (2022: 89%) of our own operations by square meters are monitoring and tracking waste. By the end of 2023, a total of 26,382 tons (2022: 32,246 tons) of waste was generated, and we achieved an accumulated diversion rate of 89% (2022: 88%) for administrative offices and distribution centers.
We regularly track the environmental impact related to the transport of our goods. Compared to the previous year, performance remained relatively stable. While the use of air freight decreased to 1% in 2023 as part of our efforts to counterbalance covid-related supply chain challenges, the vast majority of our transportation continued to take place via sea freight and truck.
Our sustainable article offering has steadily increased over the last years. Our ambition is that 90% of our articles will be sustainable by 2025. We define articles as sustainable when they show environmental benefits versus conventional articles due to the materials used, meaning that they are – to a significant degree – made with environmentally preferred materials. The majority of the environmentally preferred materials currently used are recycled materials or more sustainable cotton.
To qualify as a sustainable article, environmentally preferred materials have to exceed a certain predefined percentage of the article weight. The applied criteria for environmentally preferred materials and the percentage of the article weight are defined based on standards reflecting the latest industry developments, competitor benchmarks, and expert opinions: For apparel, the environmentally preferred material content is required to be at least 70% of the article weight, for accessories and gear at least 50%, and for footwear at least 20%. 7 This standard has been applied since 2022.
In 2023, almost eight out of ten of our articles were sustainable according to this definition, and consequently exceeded our planned annual milestone set for this year. This achievement was supported by progress across all categories. More than 90% of all apparel and accessories and gear articles were already sustainable. Our sustainable footwear offering nearly doubled compared to the previous year, despite the technical difficulty to develop sustainable solutions at scale. On top, we experienced challenges with regard to the availability of more sustainable, high-performing, and economically scalable materials in 2023.
Critical to this success was the progressive evolution of foundational capabilities to create more transparency and higher accuracy for material and product data. This required investments into our IT infrastructure and now enables automated measurement of sustainable components for each of our articles. Progress toward this target was successfully verified by a third party for the second consecutive year under the most reliable form of auditing (‘reasonable assurance’), increasing awareness across the entire company and supporting our system readiness for future requirements.
The most commonly used materials are listed in the following table.
Selection of key material types used for adidas products 2023 1Material
